Stories

Thu, 28 May 2026

Thu, 28 May 2026 The £5 coffee that tells a story of global economic turmoil

Coffees at some city centre outlets now cost £5. It's a story of tariffs, the climate, Gen Z cultural tastes, and savvy coffee farmers playing the market, writes Faisal Islam
Here are some key points from the article: 1. Supply chain disruptions: Climate problems, such as droughts and floods, are affecting coffee production in countries like Brazil and Vietnam. Geopolitical tensions, including conflicts over shipping routes, are also causing delays and increased costs. 2. Commodity price surge: The combination of these factors has led to a significant increase in the price of raw coffee, which is expected to be passed on to consumers. 3. Sticky prices: Despite the potential for price normalization as harvests recover, prices may remain high due to consumer willingness to pay extra for their favorite drink. 4. Premiumization and experience-based sales: As consumers become more willing to pay higher prices, coffee shops are responding by offering premium products and experiences, such as cold brews, specialty drinks, and personalized service. 5. Automation and low-cost options: Companies like Greggs in the UK are using automation to keep prices low and remain competitive. Some of the key statistics mentioned in the article include:
* 4,000 miles longer shipping route due to conflict over shipping routes
* £2.40 regular latte price at Greggs, compared to other UK coffee shops
* Luckin Coffee's expansion into the US market The article also mentions some interesting trends and companies, such as:
* The rise of cold brews and matcha drinks among younger consumers
* Luckin Coffee's use of data analytics and personalized service to attract customers
* Greggs' success in using automation to keep prices low Overall, the article suggests that the global coffee market is experiencing a fundamental shift due to changes in consumer behavior and preferences. As companies adapt to these trends, it will be interesting to see how the market evolves and what implications this has for consumers and producers alike.